True Performance Gap Analysis

Variance or gap analysis which are either positive or negative are being normally applied in most business evaluation or appraisal processes.

The variance gaps could be broken down into sub-variance analysis:  broken down analysis to explain the causes of the gaps.  This is also called the performance network analysis.

The output input analysis is much deeper and better root cause analysis where true efficiency and performance are measured within  the dynamic of two performance periods.

The excel program could be used for the above purposes.

Graph could illustrate and distinguish true performance where output contributed by the increase of volume inputs are identified and eliminated.

The following performance areas could be measured by the output input analysis.

1. Corporate objective (CEO objective)
2. Functional departments 
• marketing
• production 
• purchasing
• HR
• Finance
3. costs, volume, profit model
4. working capital
5. fixed capital
6. Cash flow Projection
7. Financing Performance

Trainees shall bring back templates and models of performance metrics.

Through dynamic analysis, the impact caused by volume would be removed or ignored.  Thus only true performance shall be measured.

	STEPS	TOOLS	PURPOSES
1	Performance diagnosis	Gap and bench markings	Identify SWOT
2	Market Target	Market mapping	Identify market opportunity
3	Goals	Efficiency and Performance	Measures
4	Key Result Areas	Root cause analysis	Performance problems and solutions
5	Key Performance Indicator	A set of indicators	To measure performance of a job holder, section or department or business
6	Performance Measures	Output/input ratio, Non-ratio and non-finance	Measure all economic activities
7	Performance gaps	Graphic dimensional, illustration	To show by drawings the impact on output by inputs
8	Strategic Management	Strategic Map	Coordinated and integrated Strategies
9	Profitable Model	Cost, volume, profit analysis	Simulate profits with key variables
10	Business objective/goal	Return on Equity Chart	To check
11	Capital employed	Working and fixed capital	Strategic and best practices
12	Funding	Equity + Loans = Capital	A healthy capital structure
13	Expected Results of the plans	Financial Statements	To show the outcome/results
14	Healthy check on plans	Ratios	A balanced healthy outcome
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